Question

As a result of an increase in interest rates, the equilibrium interest rate___________(does not change, Rises,...

As a result of an increase in interest rates, the equilibrium interest rate___________(does not change, Rises, or falls) and the equilibrium quantity of money___________ ( Decreases, Increases, or does not change)

Which of the following factors may also be responsible for a shift in the money demand curve? Check all that apply.

The level of foreign direct investment

The discount rate

The rate of inflation

Foreign demand for a country’s goods

Suppose that the demand for money is unstable and the Federal Reserve chooses to control the money supply. Which of the following would be a side effect of such a policy?

Great fluctuations in interest rates

Insignificant changes in the money supply

Insignificant changes in interest rates

Great changes in the money supply

.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Suppose the Fed announces that interest rates will continue to rise in 2018. How would...
1. Suppose the Fed announces that interest rates will continue to rise in 2018. How would this impact the market for bonds? Would it impact demand or supply? Would it cause an increase or decrease? How would it impact the equilibrium quantity, price and interest rate? Select ALL that apply - The demand for bonds.... decreases/increases/stays the same -The supply of bonds...... decreases/increases/stays the same -The equilibrium quantity..... rises/falls -The equilibrium price...... rises/falls -The equilibrium interest rate..... rises/falls 2. Consider...
Suppose the Fed announces that interest rates will continue to rise in 2018. How would this...
Suppose the Fed announces that interest rates will continue to rise in 2018. How would this impact the market for bonds? Would it impact demand or supply? Would it cause an increase or decrease? How would it impact the equilibrium quantity, price and interest rate? Select all that apply. ___ The demand for bonds decreases. ___ The demand for bonds increases. ___ The demand for bonds stays the same. ___ The supply of bonds decreases. ___ The supply of bonds...
URGENT! 51-55 Each Question has 4-6 parts, please answer all of them. - If the interest...
URGENT! 51-55 Each Question has 4-6 parts, please answer all of them. - If the interest rate in the U.S. rises relative to the interest rate in other nations, then … … the demand for dollars will shift to the left and the dollar will appreciate. … the demand for dollars will shift to the right and the dollar will depreciate. … the demand for dollars will shift to the left and the dollar will depreciate. … the demand for...
2) The Federal Reserve issues a report indicating that future inflation will be higher than had...
2) The Federal Reserve issues a report indicating that future inflation will be higher than had previously seemed likely. As a result A) the supply curve for bonds shifts to the right. B) the demand curve for loanable funds shifts to the left. C) the equilibrium interest rate falls. D) the equilibrium price of bonds rises. Answer: A 7) As a result of higher expected inflation A) the demand and supply curves for bonds both shift to the right and...
As the Federal Reserve sells bonds interest rates fall and the price of bonds rises interest...
As the Federal Reserve sells bonds interest rates fall and the price of bonds rises interest rates fall and the price of bonds falls. interest rates rise and the price of bonds rises interest rates rise and the price of bonds falls.
The demand for money rises. According to the Keynesian transmission mechanism, the interest rate __________, investment...
The demand for money rises. According to the Keynesian transmission mechanism, the interest rate __________, investment spending __________ (assuming it is interest-sensitive), the AD curve shifts to the __________ and if the AS curve is horizontal, Real GDP __________.                a.            rises; falls; left; rises                b.           falls; rises; right; does not change                c.            rises; falls; right; rises                d.           falls; falls; left; does not change                e.            rises; falls; left; falls There is...
If the Fed decreases interest rates, other things remaining the same, foreigners demand ____ dollars thereby...
If the Fed decreases interest rates, other things remaining the same, foreigners demand ____ dollars thereby ____ the price of the dollar on the foreign exchange market. Question 48 options: 1) more; increasing. 2) more; decreasing. 3) fewer; increasing. 4) fewer; decreasing. Question 49 (2 points) The relationship between the AS-AD model and the Phillips curve points out that as aggregate demand decreases, the unemployment rate Question 49 options: 1) decreases and the inflation rate rises. 2) increases and the...
When there is a decrease in supply, all else held equal, equilibrium price falls, demand increases,...
When there is a decrease in supply, all else held equal, equilibrium price falls, demand increases, and equilibrium quantity increases. equilibrium price falls, demand does not change, and equilibrium quantity increases. equilibrium price rises, quantity demanded decreases, and equilibrium quantity decreases. equilibrium price falls, quantity demanded decreases, and equilibrium quantity decreases. equilibrium price rises, demand does not change, and equilibrium quantity increases.
Scenario 14-1 The economy is in long-run equilibrium. Suddenly, due to improved international relations and the...
Scenario 14-1 The economy is in long-run equilibrium. Suddenly, due to improved international relations and the increased confidence of policymakers, citizens become more optimistic about the future and stay this way for a long time. ____ 19.   Refer to the Scenario 14-1. In the short run, which of the following describes the changes that take place in the economy? a. Both the price level and real GDP rise. b. Both the price level and real GDP fall. c. The price...
If the Federal Reserve decided to raise interest rates, it could sell bonds to lower the...
If the Federal Reserve decided to raise interest rates, it could sell bonds to lower the money supply. buy bonds to raise the money supply. buy bonds to lower the money supply. sell bonds to raise the money supply According to the equation of exchange, if real GDP and money supply stays the same, inflation is always zero. money velocity must stay the same. the rate of inflation equals the rate of change in money velocity. None of the above.